The Union government, which holds 78.92 per cent stake in Indian Oil Corporation (IOC), will sell 10 per cent stake in IOC. Through the stake sale the government expects to garner around Rs 3,750 crore to the exchequer at the current market price. The Union Cabinet on August 1 cleared the proposal in this regard. At current market price, the sale of 10 per cent stake or 19.16 crore shares would fetch the government Rs 3,750 crore. The disinvestment department of the government has already selected five merchant bankers — Citibank, HSBC, UBS Securities, SBI Capital and JM Financial — to manage the stake sale of the oil major.    

Being India's largest oil refiner, IOC has a market capitalisation of Rs 54,519 crore. It posted a net profit of Rs 5,005 crore in 2012-13, up from Rs 3,954 crore in the previous year. The company’s profit peaked at Rs 10,221 crore in 2009-10. IOC sells fuel at below-market prices, for which it is partially compensated by the government. The government’s disinvestment target through PSU stake sales in the current financial year is Rs 40,000 crore.    

So far, it has managed to raise only around Rs 929 crore through stake sale in MMTC, Hindustan Copper and National Fertiliser.